Marvin Rees receives payment from energy giant he awarded massive contract to
Bristol’s former mayor Marvin Rees is being paid by an American energy efficiency giant that he granted a major contract to – one of the largest the city council has ever signed off on.
Ameresco’s 20-year partnership with Bristol City Council, known as City Leap, aims to decarbonise the city’s energy network and was struck in 2022. The deal was first tendered at £12 billion before being reduced to £1 billion.
The firm’s payments to Rees, now Lord Rees of Easton, emerged in the former mayor’s first declaration in the House of Lords register of interests after he was sworn in as a Labour peer in February.
Rees’s newly-incorporated consulting and public speaking company, Three and Two Ltd, lists several paying clients, including not just Ameresco but Cambridge Consulting, which helped shape the City Leap deal.
It is not clear how much cash Rees has received from his company’s clients, or when the payments began. As Bristol’s mayor, Rees did not declare payments from these firms in his register of interests.
Ambitious but controversial deal
City Leap’s PR machine describes their project as a “world-first” public-private partnership. Those involved say it could provide a blueprint for other cities and regions to take on similar decarbonisation schemes.
The deal was struck four years after Bristol City Council became the first UK local authority to declare a climate emergency in November 2018. The council set a target of making the city carbon neutral by 2030, and its own estates by 2025.
At the time of the declaration, the council said it lacked the capacity, skills and financial resources to deliver the city-wide net zero target.
“Cities are where the battle against climate change will largely be won or lost,” Rees said last year. “But cities will only be able to deliver on their potential if they access the right finance, at the scale and the right time.
“The approach we developed for Bristol City Leap is a solution to that challenge by establishing a partnership with the private sector. It’s a solution I hope we will see replicated in cities across the UK and around the world.”
“It will be attractive to policy makers and climate activists because not only will it help us deliver on our climate pledges, but it supports a just transition by locking in significant economic and environmental benefits.”
While the deal has received much PR fanfare, it has not been without its controversy.
It was reported in 2022 that Ameresco had been sued by schools in the US for “misleading” them on the financial terms of a similar deal. The firm faced allegations that it secretly removed financial guarantees before contracts were signed.
The Cable has since learned that in 2022 Ameresco faced an investigation in the US over a potential breach of fiduciary duties involving its board of directors. One of its US subsidiaries was also fined $231,000 by the Environmental Protection Agency last year for an alleged hazardous waste violation.
Ameresco was approached by the Cable for comment on these investigations several times but it did not respond.
As part of the Bristol City Leap deal, council staff were also transferred to work in the private sector. Bristol Energy Service staff were moved to Ameresco, while all heat network staff were seconded to Vattenfall, a Swedish power firm that is also working on the huge project.
A key risk the council faces in the deal, according to cabinet papers from the year the partnership was agreed, is “not realising the financial benefits, or incurring additional costs” from future City Leap projects, which would mean the council losing money.
Concerns over the local authority’s control of the financial risk came in light of the Bristol Energy scandal, which caused significant losses to the taxpayer. The failed energy company, set up by Bristol City Council, lost around £35m.
Setbacks and backing from fossil-fuel investors
Ameresco was founded in the early 2000s by its millionaire owner George P. Sakellaris. It is now one of the largest cleantech companies in North America, partnering with private and public bodies on decarbonisation projects across the US and more recently in the UK.
While Ameresco specialises in clean energy solutions, two of its largest institutional shareholders are also two of the world’s biggest investors in the fossil fuel industry: investment management firms Blackrock and Vanguard. Vanguard holds a 9.3% stake in the firm worth $38 million, Blackrock 6.8% at $28 million.
Vanguard and Blackrock are two of the so-called “Filthy Four” – a group of US-based asset managers that manage over $1.1 trillion in fossil fuel investments.
The City Leap project is still in its infancy and its success remains to be seen. It has, however, been hit with setbacks – one of which added £643,000 to Bristol City Council’s energy bill.
In January the local authority was told that buying renewable energy from local community groups – as Bristol City Leap hoped and continues to plan to do – could fall foul of national regulations.
The council wants to buy cleaner energy directly from local generators. This is known as ‘sleeving’, and is designed to cut costs by stopping local energy from being sold to the National Grid only to be bought back at an inflated price.
“Unfortunately, we’ve hit a few technical roadblocks while looking at how we get through the local generation element of the sleeving arrangements,” Helen Reed, head of City Leap client and energy service, said in January.
“We’ve been working through a solution with Ameresco, but the time it’s taken to get to that solution means that we’re now not going to have the sleeving arrangements in place by March 2025.”
The setback, which has pushed any potential deal back by at least six months, relates to the government’s rules on procurement. These prevent councils and other public bodies from awarding contracts to certain types of bidders.
‘We remain satisfied’
Asked if it was aware or concerned about the issues raised in this report, a city council spokesperson said Ameresco’s appointment as a partner followed a procurement process that followed regulations. They added: “We remain satisfied with the outcome of that procurement process and that Amereso [will] continue to help our city achieve the aims of the partnership.”
The council spokesperson said it was not for them to comment on any transactions between the firm and Lord Rees following his departure from the mayor’s office.
Another paying client of the former mayor’s company, which was incorporated just weeks before his last day in City Hall, is Empire Fighting Chance. Rees has long been an ambassador of the Easton-based charity and boxing gym.
Rees has been criticised in the past by opposition councillors for not declaring he had an interest in the charity. It was reported in 2022 that Bristol City Council agreed to transfer land and a youth centre to the charity for a ‘peppercorn’ – very little – rent.
Empire Fighting Chance said the Community Asset Transfer happened in 2014, before Rees was Bristol’s mayor.
Lord Rees didn’t respond to requests for comment about the payments he has received.
An Empire Fighting Chance spokesperson, asked about the payments from Rees, said: “Marvin Rees started working for us on a project in November 2024. We have received considerable national and international interest in our work, especially from cities, so he was commissioned for a project to help us understand city infrastructure and whether our work could make a difference beyond Bristol.”
“We can confirm he did this work for a minimal fee. This project has been completed.”
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These network schemes are still not regulated and service charges and unit rates are set by the operator, which can be higher than that of conventional systems (electric and gas).Secondly its all eggs in one basket should a leak occur on a primary circuit, so everyone is with out the service until it is fixed?
Using gas boilers and then changing to heat pumps is another additional expense that should have been resolved in the first place and will add to maintenance costs and all users? Just what is the comparison in costs and what was the initial planned cost? Does anyone know?